NIFTY View for the Week - 28Nov2011-2Dec2011

NIFTY for the week was down 4.1% & it's a sigh that it doesn't feature in the list of Worst performers for the Week. For two straight weeks we have had global sell-off & major benchmark indices of the world have closed in the red.

Charts:

Hourly Charts 

On Hourly charts, NIFTY is in a consolidation mode after it came out of Downward Trend-Channel. For the short term as long as its above the trend channel it can continue to consolidate for few more days. Immediate resistance would be 4766. 

Daily Charts 

NIFTY did not have a follow up buying after the Hammer Candlestick Pattern on last friday. This led to another round of sell-off. In this sell-off previous bottom of 4728 got broken & we made a new low of 4639 & again revisited that level on Thursday.  How am I sure it's a bottom - Because of the Candle Stick structure. Both the days (Wednesday & Thursday we have had Long Shadows & managed to pullback and close above 4700 on both the days). So for the short term have a double bottom in place till we do not breach the 4700 on closing basis.

Weekly Charts

 NIFTY has had 3 major sell-offs from last November. Each sell-off has been of close to 5-6 weeks. In Each sell-off NIFTY has shaved off close to 1000 points from the start of the sell-off. The current sell-off is 4 weeks old & totally we have lost roughly 650 points. So if previous sell-offs are any indication then the current sell-off may pause around 16%(+or- 2%).

Sell-Off 1: 6181 to 5177 (16.23%)

Sell-Off 2: 5700 to 4720 (17.19%)

Sell-Off 3: 5350 to 4639 (13.28%) - Ongoing

Indicators: MACD - MACD line is about to cross the Signal line & the MACD Histogram has gone below 0 this week. Both these indicate bearishness.

Slow Stochastics - Heading southwards & no indication for any recovery soon. Even in previous instances when Slow Stochastics has started it southward journey it has managed to touch the oversold levels before resuming to move up.

Hot Stocks:

• Retail Sector - After Government's nod on allowing FDI in Retail sector, 100% FDI is allowed in Single brand retail & 51% FDI is allowed in Multi-brand retail, all retail sector stocks were hot & raised anywhere between 5-15%. Stocks were Pantaloon Retail, Shoppers Stop, Trent etc. & even the debt ridden stocks like Vishal Retail, Koutons too had a good run.
• Aviation Sector - There are strong indication that after Retail Sector, FDI may be allowed in Aviation Sector too. Keep a watch on this sector for some swift moves in the stocks. Friday Jet Airways was up 9% on expectations that Government may allow them to buy fuels directly from outside (this would mean they need not pay Sales Tax)
• Bharti Airtel - Bharti Telecom, the majority stakeholder in Bharti Airtel, has purchased a total of  14.93 lakh shares of the company for Rs. 54.51 crore, through open market transactions. Prior to the acquisition, the promoter group held a 45.55% in the company, now it stands at 45.58%. The promoter group firm acquired the shares on November 23 and November 24, 2011. Company buying shares at this turbulent times shows the confidence it has on its  future performance. Keep a close watch & the stock can outperform its peers in next few quarters & also one more trigger for this stock is, from December it would be included in the MSCI World Index. This would mean buying of shares of Bharti Airtel would be done by passive funds (that mimic these indices)
• JP Associates would be removed from BSE SENSEX (wef from 9-Jan-2012) & would be replaced by GAIL. Selling pressure would be seen in JP Associates in next few days. 

Major Events in the Forthcoming Week:

India:

• 30-Nov-2011 - Q2 GDP Numbers. Expectations from the Economists are sub 7% levels. For Q1 the numbers stood at 7.7% Last time we saw sub 7% levels on GDP growth rate was during Jun'09. So this would be the lowest levels since 30 months.
• 01-Dec-2011 - Export & Import Data, PMI Manufacturing Data.
• 01-Dec-2011 - Weekly Food & Fuel Inflation Data(For week ending 19-Nov-2011).

Global:

• 02-Dec-2011 - US Unemployment Data for the Month of November'2011.

Bottom Line:

In 2 weeks NIFTY has lost 8.5% making it one of the worst performing markets. NIFTY made a new low this week after breaching important support levels of 4728. 

All indicator indicate bearishness. For the short term if NIFTY manages to cross above 4765, it can attempt to reach 4854, 4930. However if manages to close below 4700, it can move swiftly to 4639 levels & sustaining below it can take it to multiple support levels of 4540. Closing below 4500 can lead NIFTY swiftly to 4400 levels.

NIFTY Supports & Resistances - 4420 <- 4540 <- 4639 <- 4710 -> 4766 -> 4854 -> 4920

(I apologise for quoting that GDP numbers were expected on Nov 25th (In my previous post)